Chap 01 23e Macroeconomics
1) For economists, the word "utility" means
A) versatility and flexibility.
B) rationality.
C) pleasure or satisfaction.
D) purposefulness.
2) In economics, the pleasure, happiness, or satisfaction received from a product is called
A) marginal cost.
B) rational outcome.
C) status fulfillment.
D) utility.
3) When economists refer to scarcity, they are referring to
A) a situation where what we want of something exceeds what we have of that thing.
B) a situation where what we have of something exceeds what we want of that thing.
C) any situation where an item is limited in amount.
D) the want-satisfying properties of a good or service.
4) When economists refer to rational self-interest, they are referring to
A) the idea that people never act impulsively.
B) selfishness.
C) the purposeful pursuit of higher utility.
D) seeking the common good.
5) When economists say that people act rationally in their self-interest, they mean that
individuals
A) look for and pursue opportunities to increase their utility.
B) generally disregard the interests of others.
C) are mainly creatures of habit.
D) are usually impulsive and unpredictable.
1
,6) According to Emerson: "Want is a growing giant whom the coat of Have was never large
enough to cover." According to economists, "Want" exceeds "Have" because
A) people are greedy.
B) productive resources are limited.
C) human beings are inherently insecure.
D) people are irrational.
7) Which of the following is most accurate about economists' view of purposeful behavior?
A) People are inherently greedy with no regard for the well-being of others.
B) Purposeful behavior makes people immune from faulty logic.
C) Pursuing self-interest sometimes includes making personal sacrifices for others.
D) While people undertake actions with a purpose, they rarely give much thought to the
costs of their actions.
8) Momo tells her roommate, "I might as well go to class, I don't have anything better to do
right now." Momo's statement suggests that
A) the marginal benefits of attending class outweigh the marginal costs.
B) the marginal costs of attending class outweigh the marginal benefits.
C) Momo doesn't face any opportunity costs of attending class.
D) going to class is always the activity that will give Momo the most utility.
9) Kailani tells her partner, "I'm going to quit my job and go back to school." Based on this
statement we can safely conclude that
A) the utility Kailani receives from working is negative and not outweighed by the
income she receives.
B) the wage Kailani receives is not very high.
C) Kailani doesn't like her job.
D) Kailani believes that going back to school will provide her with more utility than
remaining at her job.
10) According to economists, economic self-interest
A) is a reality that underlies economic behavior.
B) has the same meaning as selfishness.
C) means that people never make wrong decisions.
D) is usually self-defeating.
2
,11) José sold gold coins for $2,000 that he bought a year ago for $2,000. He says, "At least I
didn't lose any money on my financial investment." His economist friend points out that in
effect he did lose money because he could have received a 3 percent return on the $2,000 if
he had bought a bank certificate of deposit instead of the coins. The economist's analysis in
this case incorporates the idea of
A) opportunity costs.
B) marginal benefits that exceed marginal costs.
C) imperfect information.
D) normative economics.
12) A person should consume more of something when its marginal
A) benefit exceeds its marginal cost.
B) cost exceeds its marginal benefit.
C) cost equals its marginal benefit.
D) benefit is still better.
13) A person should consume less of something when its marginal
A) cost exceeds its marginal benefit.
B) benefit equals its marginal cost.
C) benefit is positive.
D) benefit exceeds its marginal cost.
14) Economics may best be defined as the
A) interaction between macro and micro considerations.
B) social science concerned with how individuals, institutions, and society make optimal
choices under conditions of scarcity.
C) empirical testing of value judgments through the use of logic.
D) study of why people are rational.
15) The study of economics is primarily concerned with
A) keeping private businesses from losing money.
B) demonstrating that capitalistic economies are superior to socialistic economies.
C) choices that are made in seeking the best use of resources.
D) determining the most equitable distribution of society's output.
3
, 16) The economic perspective entails
A) irrational behavior by individuals and institutions.
B) a comparison of marginal benefits and marginal costs in decision making.
C) short-term but not long-term thinking.
D) rejection of the scientific method.
17) According to the economic perspective
A) scarcity requires that people make choices.
B) people will attempt to maximize the difference between marginal benefits and
marginal costs.
C) people only consider their own utility when making choices.
D) resources are sufficiently abundant that everyone should have their wants satisfied.
18) Purposeful behavior suggests that
A) everyone will make identical choices.
B) resource availability exceeds economic wants.
C) individuals may make different choices because of different desired outcomes.
D) an individual's economic goals cannot involve trade-offs.
19) Purposeful behavior suggests that
A) individuals focus primarily on the interests of others.
B) decisions are unaffected by emotion.
C) individuals and institutions seek to increase their utility.
D) people are immune from faulty logic.
20) Purposeful behavior means that
A) people are selfish in their decision making.
B) people weigh costs and benefits to make decisions.
C) people are immune from emotions affecting their decisions.
D) decision makers do not make mistakes when weighing costs and benefits.
4
1) For economists, the word "utility" means
A) versatility and flexibility.
B) rationality.
C) pleasure or satisfaction.
D) purposefulness.
2) In economics, the pleasure, happiness, or satisfaction received from a product is called
A) marginal cost.
B) rational outcome.
C) status fulfillment.
D) utility.
3) When economists refer to scarcity, they are referring to
A) a situation where what we want of something exceeds what we have of that thing.
B) a situation where what we have of something exceeds what we want of that thing.
C) any situation where an item is limited in amount.
D) the want-satisfying properties of a good or service.
4) When economists refer to rational self-interest, they are referring to
A) the idea that people never act impulsively.
B) selfishness.
C) the purposeful pursuit of higher utility.
D) seeking the common good.
5) When economists say that people act rationally in their self-interest, they mean that
individuals
A) look for and pursue opportunities to increase their utility.
B) generally disregard the interests of others.
C) are mainly creatures of habit.
D) are usually impulsive and unpredictable.
1
,6) According to Emerson: "Want is a growing giant whom the coat of Have was never large
enough to cover." According to economists, "Want" exceeds "Have" because
A) people are greedy.
B) productive resources are limited.
C) human beings are inherently insecure.
D) people are irrational.
7) Which of the following is most accurate about economists' view of purposeful behavior?
A) People are inherently greedy with no regard for the well-being of others.
B) Purposeful behavior makes people immune from faulty logic.
C) Pursuing self-interest sometimes includes making personal sacrifices for others.
D) While people undertake actions with a purpose, they rarely give much thought to the
costs of their actions.
8) Momo tells her roommate, "I might as well go to class, I don't have anything better to do
right now." Momo's statement suggests that
A) the marginal benefits of attending class outweigh the marginal costs.
B) the marginal costs of attending class outweigh the marginal benefits.
C) Momo doesn't face any opportunity costs of attending class.
D) going to class is always the activity that will give Momo the most utility.
9) Kailani tells her partner, "I'm going to quit my job and go back to school." Based on this
statement we can safely conclude that
A) the utility Kailani receives from working is negative and not outweighed by the
income she receives.
B) the wage Kailani receives is not very high.
C) Kailani doesn't like her job.
D) Kailani believes that going back to school will provide her with more utility than
remaining at her job.
10) According to economists, economic self-interest
A) is a reality that underlies economic behavior.
B) has the same meaning as selfishness.
C) means that people never make wrong decisions.
D) is usually self-defeating.
2
,11) José sold gold coins for $2,000 that he bought a year ago for $2,000. He says, "At least I
didn't lose any money on my financial investment." His economist friend points out that in
effect he did lose money because he could have received a 3 percent return on the $2,000 if
he had bought a bank certificate of deposit instead of the coins. The economist's analysis in
this case incorporates the idea of
A) opportunity costs.
B) marginal benefits that exceed marginal costs.
C) imperfect information.
D) normative economics.
12) A person should consume more of something when its marginal
A) benefit exceeds its marginal cost.
B) cost exceeds its marginal benefit.
C) cost equals its marginal benefit.
D) benefit is still better.
13) A person should consume less of something when its marginal
A) cost exceeds its marginal benefit.
B) benefit equals its marginal cost.
C) benefit is positive.
D) benefit exceeds its marginal cost.
14) Economics may best be defined as the
A) interaction between macro and micro considerations.
B) social science concerned with how individuals, institutions, and society make optimal
choices under conditions of scarcity.
C) empirical testing of value judgments through the use of logic.
D) study of why people are rational.
15) The study of economics is primarily concerned with
A) keeping private businesses from losing money.
B) demonstrating that capitalistic economies are superior to socialistic economies.
C) choices that are made in seeking the best use of resources.
D) determining the most equitable distribution of society's output.
3
, 16) The economic perspective entails
A) irrational behavior by individuals and institutions.
B) a comparison of marginal benefits and marginal costs in decision making.
C) short-term but not long-term thinking.
D) rejection of the scientific method.
17) According to the economic perspective
A) scarcity requires that people make choices.
B) people will attempt to maximize the difference between marginal benefits and
marginal costs.
C) people only consider their own utility when making choices.
D) resources are sufficiently abundant that everyone should have their wants satisfied.
18) Purposeful behavior suggests that
A) everyone will make identical choices.
B) resource availability exceeds economic wants.
C) individuals may make different choices because of different desired outcomes.
D) an individual's economic goals cannot involve trade-offs.
19) Purposeful behavior suggests that
A) individuals focus primarily on the interests of others.
B) decisions are unaffected by emotion.
C) individuals and institutions seek to increase their utility.
D) people are immune from faulty logic.
20) Purposeful behavior means that
A) people are selfish in their decision making.
B) people weigh costs and benefits to make decisions.
C) people are immune from emotions affecting their decisions.
D) decision makers do not make mistakes when weighing costs and benefits.
4
